Investors in gold are bracing themselves for a possible spurt in buying after the rate cut announcement by the US Federal Reserve yesterday (April 30th), reports Reuters.

The organization cut interest rates by a quarter of a percentage point, as expected, prompting some to speculate that the economy may further lose public confidence.

In turn, this could be good for gold prices as those with assets seek to invest them in the precious metal as a safe haven against financial woes.

David Moore, an analyst with the Commonwealth Bank of Australia in Sydney, said that the rate cut by no means suggests that the worst is over for the US economy.

"I can sort of see a situation where perceptions of the US economy remain fairly changeable in the next couple of months. In that situation, we're likely to see the US dollar remain vulnerable," he said, according to Reuters.

Last month, precious metals analyst Jim Sinclair said that he believes gold prices could hit $1,650 an ounce in the coming months, despite any further rate cuts.